IBM Exploring New Use Cases, Business Model for Watson Cloud Services

IBM says its all-knowing, English-speaking computer that triumphed in the "Jeopardy" television show last year will add value to IT systems in both health care and financial services in 2012 and beyond.

IBM is busy these days taking its celebrated Watson knowledge base and user application to the markets. The first three verticals it has targeted are ones that are often groundbreakers when it comes to new IT: financial services, health care and government.
The company isn't at liberty just yet to talk about how Watson may be used in the government sector (finding tax dodgers, perhaps?), but at GigaOm's Structure 2012 Conference June 20 on the UC San Francisco campus, it did indeed discuss the other two markets.

In an on-stage interview with GigaOm Senior Writer Stacey Higganbotham, IBM's Vice President of Watson Commercialization Dan Cerutti offered some insight into the all-knowing, English-speaking computer that triumphed in the "Jeopardy" television show last year. IBM is banking that it will sell into IT systems in both health care and financial services.

Watson Works Behind the Scenes
"The application we're building is to help clinicians diagnose and treat killer diseases, and we're starting with cancer," Cerutti said. "Watson is behind the scenes [when a patient goes in to see a clinician]. The idea is to build a system that has all the information you as a doctor will need, because you can't know it all. Clinical reports, every textbook that matters, disclaimers that are associated with drugs, everything.
"Watson can do work behind the scenes and present to the doc some options of what might be ailing you."

Cerutti said IBM will start a trial at New York's Memorial Sloan-Kettering Hospital later this year for cancer care.
"We're working with Sloan-Kettering and WellPoint, the insurance company, to build a solution. We hope by the end of the year to give it to a handful of cancer care centers to begin to get some real experience with the system, to diagnose and provide the appropriate treatments for cancer," Cerutti said.
The business model for Watson, at least in this use case, will be different from that of a standard software as a service- (SaaS-) type method, Cerutti said.
"This is an area that we haven't quite figured out yet," Cerutti said. "But the IBM company has decided to make a huge investment here; we think we can change the world in a very significant way--and not just in health care.
"This is not a simple system, and any given hospital or health plan doesn't have the resources or know how to do this, so we're doing it. We're stepping up to the bar and building what we call Watson for Healthcare. On top of the Watson platform will be applications: One will diagnose and treat cancer. These are cloud-based services, as you would expect."
Will It Work on Commission?
The way IBM will get paid for providing these services is that the company will, in effect, get a commission on the use of Watson.
"We're going to ask our partners for a share of the value they create," Cerutti said. "So if they don't create value, we don't get anything."
"So you're saying Watson will work on commission?" Higganbotham asked.
"You said it, not me," Cerutti answered, to laughs from the audience.
Cerutti was asked to compare Watson with Apple's Siri, the popular speech-recognizing iPhone personal-assistant application.
"Siri is an interesting application," Cerutti said. "It does two things: one thing pretty well, and one other thing that it will get better at. The first is just understanding what you said, literally translating words to text. We can put that sort of front end on any Watson application. The deeper thing that Siri does is that it's effectively a search engine. It finds appropriate answers, and that's cool."
But that's not what Watson does, Cerutti said.
"Watson is a much different system, that is, in fact, reacting to the information that it is fed," Cerutti said. "Watson is not a deterministic system. Watson learns, based on the information that's fed to it. It's also trained; it's a machine-learning system. It's only as smart as the information it's fed. It's the way any human being would learn."
'Limitless Opportunities'
Besides health care and financial services, for which applications are now being developed, Cerutti said IBM thinks the "opportunities are limitless."
"If you make important decisions in any field, Watson can sit at your side as your adviser, and you can spend your time on your decisions, knowing that you have a broader base of information available to you," Cerutti said.
GigaOm Structure 2012 continues through June 21.
Chris Preimesberger is eWEEK Editor for Features and Analysis. Twitter: @editingwhiz

Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz